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Central Bank of France Tests Blockchain-Backed CBDC Targeting Debt Market

As the adoption of digital assets is becoming more mainstream, some countries are awakening to join the flow. This has borne the desire to get a central bank digital currency, CBDC, by some countries. One of such countries is France.

For some months, the Central Bank of France has explored a central bank digital currency (CBDC). Recently, the apex bank is rounding off a remarkable trial of a CBDC based on blockchain within the country’s debt market.

According to the reports, there has been a 10-month testing experiment for a central bank digital currency in the country. Banque de France issued the experiment for its government bond deals with the participation of more than 500 institutions.

How Did The CBDC Pilot Go?

During the experimentation process, the participants were meant to trade some security tokens and government bonds. The settlement for their trades was via a CBDC, which the apex bank supplied.

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Furthermore, the process involved testing CBDC use cases within the range of daily activities. For example, some include issuing new bonds, utilizing the bonds for agreement repurchase, coupons payment, and deal redemption.

Euroclear, a financial service company based in Belgium, led the CBDC trial. The company utilized a system that IBM, an American technology giant, developed.

There are various other participants in the central bank digital currency test. Some of them are the French Central Bank, the country’s public debt office, and some major financial firms operating in the country. Others are Societe Generale, Credit Agricole CIB, BNP Paribas and HSBC.

Isabelle Delorme, an executive of Euroclear, commented on the CBDC testing experiment. She said that together, they have succeeded in measuring the technology’s inherent benefits. Hence, they concluded that CBDC can safely and securely settle central bank money.

Furthermore, IBM’s global director of financial markets, Soren Mortensen, delivered his speech regarding the project. He said that the success of the project was beyond other past blockchain initiatives.

The reason was its flawless trial of most central bank processes and central security depository. In addition, he mentioned that there’s the elimination of existing interim steps like reconciliation between market intermediaries.

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In  March 2020, the Central Bank of France launched an experimental CBDC program. Since then, the apex bank has constantly been testing other use cases of central bank digital currency.

In June, Banque de France collaborated with SEBA, a Swiss Cryptocurrency Bank, to test a CBDC for stimulating the settlement and transfer of listed security.

Cryptocurrency market is in recovery mode | Source: Crypto Total Market Cap on TradingView.com

Also, the central bank previously used a private blockchain platform to handle a central bank digital currency for issuing simulated shares worth about $2.4 million.

Featured Image From Pexels and Chart From TradingView.com

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How IBM Will Turn Patents On NFTs With Its Blockchain

IBM’s partner IPwe will tokenize patents as non-fungible tokens (NFTs), according to a press release. The company will build an infrastructure to store the NFTs. The objective is to improve the way patents are traded. IPwe hopes to “bring new liquidity to this asset class for investors”.

Hosted on IBM Cloud, IPwe’s platform operates as a “global patent marketplace”. On it, users can research, seek, and transact with Intellectual Property. The company has operations in over 50 countries worldwide.

Per the release, the cooperation aims to offer corporations and investors a transparent platform to trade their patents. A company could use a patent’s NFT and add it to its balance sheet. Thus, there could be a “transformation” in how this asset class is commercialized around the world. IPwe CEO Erich Spangenberg said:

The use of NFTs to represent patents will help create completely new ways to interact with IP. This is expected to benefit not only large enterprises that have significant intellectual property, but it will bring new opportunities to small and medium enterprises and even individual IP owners. We believe it will usher in new offerings by financial services firms.

How Will The NFTs Be Traded On IBM Blockchain

IPwe platform will allow NFTs owners to buy, license, finance, sell and commercialize their patents on a global marketplace powered by IBM Blockchain. The cooperation also seeks to ease the sector which, according to the release, has been “difficult to manage, valued” and trade due to the low liquidity.

IPwe’s marketplace allegedly has been adopted by governments, companies, educational institutions, and many other entities. In addition to its commercialization, Intellectual Property NFTs could be used as collateral in a transaction or to give assurance on a company’s value. Therefore, an entity could have a new mechanism to obtain financial support.

The marketplace has a registry that allows a patent’s history to be store with an “enhanced search enable by IBM AI”. In the coming months, this ecosystem will be expanded to include financial institutions, insurers, companies, patent stakeholders, and others, according to the press release.

Jason Kelley, General Manager Global Strategic Partnerships for IBM services said the following on the cooperation:

Our work with IPwe is another example of our collaboration with leading innovators to drive outcomes powered by blockchain capabilities and digital assets that have the potential to transform entire industries.

Kelley added that blockchain technology has become a “critical tool” for any business looking to disrupt and transform its operation. IBM and IPwe have been working for the past 3 years to make the marketplace a “secure” platform, with ease to transact and generate analytics. The partners expect to commercialize NFT by the end of 2021.

Ethereum has maintained its top position as the preferred platform to trade with NFTs. At the time of writing, ETH’s price sits north of $2.303,16 with a 6.1% profit in the daily chart. In the weekly and monthly chart, ETH has 7.5% and 26.7% profits, respectively.

IBM NFTs Ethereum ETH
ETH with small gains in the daily chart. Source: ETHUSD Tradingview